2008 May | www.MinnesotaInvestors.com

Archive for May, 2008

Mortgage Down Payment Assistance Program

Wednesday, May 28th, 2008

Mortgage Down Payment Assistance Program

There are programs like Nehamiah, Ameridream, you can even use them with FHA financing.

http://www.fha.com/program_ameridream.cfm

I am personally doing a deal right now with Nehamiah with FHA, let me go over a little bit about how it works.

The seller participates into this program and pays a fee at closing to this company, the company charges a processing fee, on my transaction it’s $295. Then the buyer is able to get a similar amount from Nehamiah for the time of closing. The seller doesn’t owe it unless the deal goes through. This idea has been tested with the courts and passed.

The form I have right now with Nehamiah is a 1 page form that the seller signs.

The website is www.getdownpayment.com 1-877-634-3842

There is a contribution amount of 1-6% on one line. Another line has the processing fee. Another line has the total amount due to Nehamiah Corporation of America.

They claim to be the largest privately funded down payment assistance program. They describe it as gift funds for the buyer. The seller signs, and prints there name and fills out the address.

It does read as the following:

Note: You are only committed to pay the above contribution and fee if a home buyer utilizes the nehamiah program to purchase your home.

What I like about this program is right now with 550-600 credit scores we have had people getting loans done up to 100% financing. How do we do this? Well with the Nehamiah program that contributes 3% and the other 3% in closing costs paid by the seller rolled into the loan, that helps to make it almost no money out of pocket for the buyer. Buyer may still need to pay for an appraisal, maybe an inspection, but it’s really easy with this program and the credit scores and other qualifying standards are pretty fair.

If you want any help at any point looking at properties and aren’t working with an agent, let me know ron@minnesotainvestors.com

BookMark, Email, or Subscribe This Page, Tell Friends!

Home Costs: A Homeowners Costs to Owning a Home

Monday, May 26th, 2008

When I run my excel spreadsheet with the costs of owning a home or rental property, here are the incomes, expenses, and tax considerations I consider when deciding profits or losses.

Market Value @ the time of purchase
Net Price from seller
+Closing Costs on top
+Buy + List agent commission on top
Interest Rate
Down Payment %
Years(term) of Loan
Starting Loan amount

ANNUAL HOLDING COSTS
Annual PI(Principle Interest) Paid
Annual Property Taxes
Annual PMI(Private Mortgage Insurance)
Annual Hazard Insurance Premium

Annual Maintenance
Assoc Fee/lawn-snow-ins, etc.
Annual Marketing for rent
Annual Unpaid Waterbill
Annual Unpaid Rents
Annual Carpet replacement
Annual Re-Paint expense
Annual Vacancy Lost Rent $
Total Expenses Annually

Avg. Months Vacant each year
Monthly Rent

SELLING COSTS
Market Value if sold retail
6% list fee
1% seller closing costs
PITI holding costs until close
Pay to get to show mint condition for resale
Months vacant while listed on MLS
Average Annual Appreciation
Years Held

Total Expenses Holding Costs
Total Expenses Selling Costs
Total Holding + Selling costs

Total Rents collected
Total Commission Reserves

Net to Seller
Months Held
Loan Payoff at sale

AFTER THE CLOSING
Proceeds at close
Net$ Pre-Tax(less down payment returned)
15% Capital Gains if >1+ year
Net $ After Capital Gains

Other things to consider
Annual Rent Increases
Depreciation Write-Off
Depreciation Recapture
Interest Write-Offs
Rental Income Tax Bracket
Interest Only Loan
Vacancy factored in while rehab
rental deposit retained
option deposit retained

BookMark, Email, or Subscribe This Page, Tell Friends!